Jim's Blog

Developing a pleasing and friendly relationship with the customer is a common approach by most of today's business to business salespeople. It has been the common approach for many years. Often I would be told by a salesperson that a particular account was hard to crack because the buyer has a strong relationship with the salesperson fromanother firm, being the competitor.

SO WHAT? Most of those relatonships will not endure a better salesperson and supplier. A salesperson that approaches the sales call prepared to engage the customer with valuable information, follow through on open items and consisitently present new ideas and problem solving products will beat the competitor that is relying on their relatonship with the buyer to continue to enjoy a large share of the business.

This is really good news for the business that invests in sales training and operations to be superior in how they conduct their sales calls and transact customer orders. Most relationships can be cracked by being the best supplier.

“Why bother with financial reports? No one really reads them,…I send them out to all the managers of our branch P&L centers and I never get a call asking for help on how to analyze them or how best to use them.”

This is what I hear frequently from the CFO’s of wholesale distributors. Often, the company has purchased and installed significant upgrades to their IT system or purchased and transitioned over to a more beefier IT base that spews out a lot of data in very fancy financial reports for the branch,…along with links to uncover more data all related to a branch business center.

Unfortunately it usually comes down to the simple truth that “if the boss is not focused on any data in the reports, then I am not going to focus on it”.

It’s too bad this is the norm in our industry and here is why. All the data in the reports is a result of activity going on in the business. If the branch business would freeze in time no data would be generated during that period. Conversely every minute of the day the activity in the branch creates or impacts data in the financial reports. So all the data found in the reports is a mosaic picture of the activity,…or how I like to refer to it as organizational behavior in the branch.

The trick to uncover the secrets in the financials is to create a list of questions about productivity, pricing, inventory investments, shipping etc. and dig into the reports and collect data points that directly or indirectly impact the topic, determine a good base denominator and create a ratio. For example, the warehouse operation seems to be consistently behind in receiving, and missing customer delivery dates. On the surface it looks like you should hire more people. You certainly must fix this issue quickly but is spending more money on a warehouse FTE going to fix the problem? This is where the data comes in. Pull the data on warehouse shipments per day, per week, per month and apply a variance back say two years. Then look up warehouse sales data, using cost of goods sold value and create a ratio of warehouse sales per warehouse FTE. That is just two of many warehouse productivity ratios you could create. Now, trend those ratios over a 2 or 3 year period to see what direction they have gone. If the ratios show a consistent reduction in productivity, your problem is not solved by adding more people.

Something is going on out in the warehouse creating a decline in productivity or work getting done as efficiently as it was prior.

You can dig out data on sales, every cost line in the p&l, and on investment in inventory plus many more. The idea is to get creative and dig out data that touches a particular concern or activity, create a ratio so you are comparing performance to a base and then trending it.

Another quick example is entertainment expense compared to sales over time, or compared to gross profit over time. Let’s say entertainment continues a strong trend line of double digit growth the last few years but gross profit has remained stagnant. Perhaps this questions whether you are entertaining the right customers.

A series of numbers created means so much more than reading the numbers in a report. You do not need the same analysis done every month. Get creative and look for ways to use data to get at the behavior going on in the branch.

You can read more about this in my book 5 Fundamentals for the Wholesale Distribution Branch Manager (nawd.org/ jim ambrose) which explains this in more detail and with more examples in Fundamental #5

The specialist is the person that is assigned to a certain product group. The term most often used to describe the job is he or she “supports” that product in your business.

Why do we need specialists?

The manufacturer may require the wholesaler have the specialist (s) to “support” the product, or the collective voice of the salespeople strongly suggested they needed help selling the product line, or a relative needed a job so a specialist role was created. I want to provide thoughts on the first two reasons.

The first important change to make is to delete the word “support” from the job description. If that is how that person thinks of himself as to his role in the business then you should have a discussion to change it.

A support role implies a more reactive approach to assisting and helping where necessary or when asked. This should not be a reactive role but a pro-active selling role.

If the manufacturer you represent requires “specialist” then certainly hire the required number. But, change their job description from “supporting the product line to product managers. Charge them with being responsible for the total sales of their product group. They also should spend most of their time in front of the best share gain potential customers, not answering phone calls as an inside tech support person.

They should be trained in selling skills and be expected to make solo customer sales calls. Too often these folks complain about the sales people not including them for joint sales calls. That is a very bad thing if that is the reason they are not out in front of customers. They should not need the salesperson to "take them in."

In addition to making them responsible as product managers, they must be included in all products training sessions in the company and be reasonably competent to see, discuss and qualify potential opportunities across the distributor’s product offering. Why not? They are a key part of your selling arsenal, and they certainly have a little extra time in every sales call to look around and mention a few other things on the call.

Now you have terrific sales productivity. Because of this person’s special knowledge in the product they often can get deep into a customer’s business as the technical expert. With this special engagement going on their Call Packet should have a few items on it that opens up opportunities for the total business. If you do not know about working a Call Packet in a customer engagement, please read Cracking Accounts. You can find it and buy it right here on the website, or go to jimambroseworkshops.com

I am often asked by clients about investments they are considering to make in technology to improve order transactions, particularly in warehouse operations. That is, the receiving, inventory placement, pulling, packing and shipping processes. I am very much in favor of all technology upgrades if the investment will significantly improve speed and accuracy and help gain profitable share at your chosen accounts. You will gain profitable market share with greater speed and perfect error free shipments.

But, technology upgrades and investments are not the whole story. A phrase that has been used and re used for decades holds true today. Success is 15% technology and 85% leadership. We just might miss this ingredient when we think of our warehouse operations. After all, it is referred to as “out there” in the warehouse. Our warehouse staff is every bit affected by good or not so good leadership as is any other function.

If you are going to make an investment in warehouse technology, be sure to invest in communication and leadership training for the warehouse manager. The communication habits and leadership personality of the warehouse manager will impact speed and accuracy as much as or more (85%) than the investment in new technology.

If you have repeated productivity and accuracy issues in the warehouse, consider the communication habits and leadership skills of the manager. Fix that first before you spend money on technology. You will end up with the same level of mistakes, just faster.

I recently took up a new hobby, which is open water scuba diving. With 43 years in the wholesale industry I cannot help but relate most things back to "the business." In diving you always have a buddy. You and your buddy help each other in all aspects of the dive, checking each other's equipment before you dive, monitor and assist each other under water to make the dive most pleasurable.

It reminds me of how the first line managers (branch managers et al.) relate to each other in our industry. The first line managers are closest to the customer and the realities of the business and they eagerly help other each other freely and completely. Like your dive buddy.

In diving there is a dive master. The dive master oversees the dive group. The dive master makes sure everyone is safe and having a pleasurable dive. The dive master understands everyone's skill level and gets involved when and where he can to add something to help the diver's skill development, enjoy the dive and keep bad things from happening.

The dive master makes me think of middle management. That is, in our typical company structures with a lot of direct report branch managers that report to the next level up,...middle management

But, unlike the dive master they are often measured on their own performance. There is NO buddy system among middle management either. It is too competitive. And unlike the positive goals of the dive master, their goal is to make their performance look good.

Wouldn't it be far better if they were like the dive master and instead of having their own performance measured in the aggregate and telling their direct reports how they should or must do things in order to produce the right numbers for the group; their primary role was to monitor and assist in developingprofessional skills and leadership techniques of each person based on their needs and experience?

But, in our world of metrics, how would you measure their performance?

Cracking an account in the wholesale business-to-business market place no longer is dependent on the sales-person building a "relationship" with the buyer. No one has time for that. The typical technique in the sales call is when the salesperson spends most of the time telling the customer all about the "value add" services the company can offer. Forget selling your value add.

Instead understand what the buyer "values" in a supplier. I call that doing a customer value audit. More on that in a later blog. Once you understand what the buyer values in supplier, decide if you want to provide it, and if you do, provide it perfectly.

This technique is not the process of uncovering pain points,....instead you want to know what will make the buyer happy when dealing with suppliers.

In my book Cracking Accounts (published by JJ Ambrose, order through jimambroseworkshops.com) I explain creative ways to uncover the "customer value audit."

By the way, your relationship will grow with the buyer as you provide perfectly what the customer values.